Major investment banks' revenue falls 9% in first quarter

LONDON (Reuters) - Revenue at the world's 10 largest investment banks fell 9 per cent to US$42.8 billion (S$53.5 billion) in the first quarter, new data showed on Monday, as tough new rules forcing banks to hold more capital led to a retreat from riskier types of trading.

Trading in fixed income, currencies and commodities (FICC) divisions fared the worst, with revenue down 16 per cent to US$22 billion, compared with US$26.1 billion a year earlier, according to consultancy Coalition.

Regulations brought in after the financial crisis that require banks to build up capital buffers to cover their risky assets have hit interest rate trading desks hard, sending revenue 19 per cent lower in the first three months of the year, while a lack of volatility led to a 26 per cent decline in foreign exchange trading, Coalition said.

Investment banks are reshaping themselves to increase their profitability and a number, including Deutsche Bank and Barclays have made cuts to FICC divisions to deal with weak volumes and the new regulatory environment.